7 minute read.
The past few years in the property market have been a challenge! As we look forward, many people are asking what we can expect from the Victorian property market in the future? Will housing prices drop with a change in government and inflation at high levels?
While it is nearly impossible to predict what the housing market will do in the next few years, we can look at what the experts say and speculate on what 2023 may deliver to the Melbourne and Victorian housing markets.
Looking closely at the policies proposed by the new Labor government and noting if this will see more first home buyers entering the market, will property investors see an increase in their investment portfolio?
FREE: Our property expert Mark Ribarsky discusses Melbourne’s real estate market March 2022 quarter and how rising interest will affect the property market.
What were the December 2021 quarter results for Victoria?
In the December 2021 quarter, there was a 13.3 per cent increase in the median house prices in Victoria. This is up from a slight decrease in the previous quarter, which was 1.9 per cent. The December average house price went from $715,000 to $810,000.
The unit price in Victoria followed a similar track with an increase of 5.9 per cent. While this is not as much growth as houses, it makes up for the drop in values from the previous quarter, which was 2.5 per cent. The December average unit price went from 590,000 to $625,000.
When you examine housing and unit prices in Melbourne, the figures remain much the same. House prices are up 11.1 per cent to $950,000, and units are up by 5 per cent to $650,000. In country Victoria, house prices are up 9.9 per cent to $560,000, and unit prices fell by 9.6 per cent, taking them to $410,000.
When examining the twelve months of 2021, houses in Melbourne and country Victoria increased by over 22 per cent, with units being a mixed bag where Melbourne increased by 6.6 per cent, and in the country regions, it increased by 9.6 per cent.
The highest number of sales were recorded in Pakenham, with 360 sales for the December 2021 quarter. Sixty-five locations were recorded in Victoria, with over 100 sales.
What happened to the Victorian housing market In 2022?
From the start of 2022, house prices started to decline slightly, and experts predict that the downward turn in house prices will continue for a while.
Even with the new Labor government being elected and their policies encouraging home ownership, the market is expected to soften towards the end of 2022 and into 2023.
The policies laid out by the Labor government may be suitable for single parents and first home buyers, but they’ll do little for rising interests and property values. However, experts have predicted this would happen regardless of who won the election.
In a market where you have interest rate rises, buyers are more cautious and may prefer to wait and see what happens with house prices.
Even with the incentives offered by the government, some may decide to eye on the side of caution. Especially when you have economists from the CBA suggesting that house prices may fall by as much as 8 per cent, although that is less concerning than those from AMP who suggest it may fall by as much as 15 per cent in the next 18 months.
In Melbourne, the average house price is $992,000, which is lower than the $1 million mark it hit in January. Although this median house price is still $84,000 more than it was twelve months ago, a substantial valuation decrease could see many of these property gains wiped away.
The Property Market Outlook for 2023
Unfortunately, there is no real way to see what will happen in the future. All we can do is speculate based on past information and what experts predict will happen.
One of Australia’s major banks (NAB) predicts that home values will drop by as much as 11.4 per cent in Melbourne properties. This reduction in valuation will counter many of the gains seen in 2021 and certainly those seen so far in 2022. If this prediction came to fruition, then the median house prices in Melbourne would end up being a little under the $800,000 range.
Some people believe these predictions result from the uncertainty of interest rates and what may happen if the rates continue to rise, as has been predicted in some circles. However, as Australia is opening its door to migrants and international students, it may attract many investors back into the market, which will be positive for the market conditions.
Investors and first home buyers are often advised to be cautious about attempting to predict the market and enter when it makes sense to their needs. Instead of focussing on a property’s value, the idea should be to buy a suitable property for an amount that fits within your means.
While predictions are interesting, they are in no way accurate, and as seen in the last few years, they can be way off the mark.
What are your predictions for house prices in 2023?
Trying to buy at the right time is often the first mistake many make. Is there ever an ideal time to buy a property?
While some predictions are that house prices could dip in 2023, when do you choose to enter the market. You could be eyeing a particular property, thinking about getting for a certain amount, and then the market turns, and you miss out completely.
You could spend the time looking at the last ten years or so of data and trying to match up property values with policy changes and attitudes. If you spot any patterns, it may give you an idea of what may happen in the future or what may occur after specific global events.
Choosing the right time to buy and sell could see you make or save $10-20,000 on a property. However, if you wait too long, that money could quickly go the other way, and it may cost you that amount.
Keeping your finger on the pulse of the housing market takes time and dedication. When many people consider getting into property, either as an owner-occupier or as an investment, they’ll only look at a few months of data. Many home buyers are not overly concerned about house prices; instead, they seek a good investment or property surrounded by features that make their life easier.
Using the services of a buyer’s agent is an excellent method for getting the correct information about the housing market. A buyer’s agent will study the markets and determine the best location for you to buy and make the most out of your investment dollar.
When you talk to your buyer’s agent about what you require in a property, they can suggest several areas based on past experiences and current market trends. In most cases, buying property means finding the right one for you and less about the market value in the short term.
If you’re interested in buying property as an investment or owner-occupier, then you can contact our team, and we’ll talk you through what is on offer today and what may be the best area for your next purchase.
To help you stay ahead of the game, consider getting an experienced and knowledgeable real estate expert on your side. A Buyer’s Agent is the perfect professional you can rely on if you have hesitations about buying property. They can assist you with the entire property buying process from start to finish. Finding the right property for you is important but so is buying it at the right time.